Patrick Grove: why the services is the next online wave in Asia

Patrick Grove: why the services is the next online wave in Asia

Published 21 August 2013 11:48, Updated 22 August 2013 00:46

Patrick Grove

As group chief executive of Catcha Group, I’ve been in the online industry for almost 15 years and I’ve rolled up my sleeves and got dirty plenty of times. It’s this hands-on experience that has helped me identify the hallmarks of a successful online business: the next wave of successes is likely to be services businesses.

Consumers are already going online to hunt down services and products, but they are often faced with the task of sifting through a lot of poor-quality information. This results in a real need to organise data into something useful and online aggregators are great at this – the success of online aggregators of travel sales and discounts bears testament to this. Aggregators of financial products are the next step for Asia.iSelect’s aggregation of insurance deals across home, car, personal and health insurance is a good example, simplifying cost comparisons into a matter of a few clicks of the mouse and empowering users to make big-ticket decisions more confidently. The key there is not just to have almost all product providers working with you with their data, but also to be driving the lead back to the product provider through online means in order to extract true online margins.

Websites and applications that enable users to hire tradespeople too will become increasingly important. ZocDoc is a New York start-up that lets users locate a doctor in any one of 35 US cities and book an appointment online. The idea can just as easily be extended to sourcing lawyers, chiropractors, cleaning services, baby sitters . . .

This matchmaking of need to service professional is increasingly important in urban settings – areas where apartment and condominium living doesn’t permit the traditional community networks that would ordinarily be a source for trusted, personal, local recommendations.

One of our companies, ASX-listed iProperty Group, is the leader in the online property space in Asia, but why stop there. Anyone who has ever owned or rented a home knows that having the papers signed is just the beginning – renovations and maintenance work require plumbers, electricians, painters . . . Providing the ability for users to search, contact, rate and review such service providers not only increases efficiency and makes a compelling business case, it works to close the knowledge gap and create comfort around what are often unnecessarily painful interactions.

Given Australia’s five to eight-year head start, Australian businesses are expertly placed to take advantage of south-east Asia’s online opportunities, but not all tried and tested ideas will directly translate. Local expertise is essential.

iProperty Group is modelled on Australia’s REA Group, but where Australia is a secondary property market, in south-east Asia most of the value is in new-home buyers, not in the purchase of re-sale property. As a result, our products had to be customised to work for property developers. The same can be said of our leading Asian online car business, ASX-listed iCar Asia, where a critical focus has been on brands and manufacturers rather than solely on second-hand dealers.

Other online businesses might not translate at all, at least not presently. OpenTable, a service that enables customers to make restaurant reservations online, may work in cities in the US, but in many parts of Asia, where most eateries are accessible and waiting lists are non-existent, such a service is less likely to be in demand. Therefore, it’s important to be clear on the problem that a business is trying to solve, whether there are enough people with that problem, and how much they might be willing to pay to have it solved. It’s why taxi apps like MyTeksi in Malaysia, Cab@SG in Singapore and Uber, a car rental app that works with hire car companies with remnant capacity (which I personally use whenever I travel), are gaining traction.

Ultimately, whomever you choose to invest in, the people behind it need to be passionate, persistent and prepared to react very rapidly to technological developments and changing patterns of use. The online ecosystem switches up often and unexpectedly, and businesses need to be able to react accordingly. The proliferation of mobile devices, particularly in south-east Asia, is significant because for many new entrants into the region’s exploding middle class, their first experience with digital is via mobile. Pivoting is all part of the game – a business that is wildly successful now might not fare as well if it fails to act on prevailing trends. Just ask traditional media.